Entries in Budget
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iStockphoto(NEW YORK) -- How much does it cost to feed a family of four -- and make sure that everyone is eating healthy food? Less than you might think, according to a new report from the US Department of Agriculture.

The USDA’s new program, My Healthy Plate, gives new guidelines for guidelines for eating fruits, vegetables, grains and proteins. Though some were wary of the cost of the healthier food recommended by the USDA, it turns out that it’s possible to feed a family of four healthy meals for a week for between $149 and $289 a week.

Feeding a family on this budget involves putting in a little more effort when shopping. The USDA says shoppers should look for sales, avoid buying pre-cut vegetables, and stay away from pricier cuts of meat.

Frugal diners should also stay in for dinner instead of going out to eat, which is typically far more expensive than a well-planned home cooked meal.

Altrendo images/Thinkstock(NEW YORK) -- While $27,000 can buy a nice car or be used as a down payment on a house, newlyweds in the U.S. would sooner spend it on their special day.

Since you only get married once -- well, that’s the general intention, at least -- no one can really blame couples for spending a small fortune on their wedding and reception.

Brides magazine in its annual survey says that the average cost of a wedding is now $26,989, which is down more than a grand from the 2008 peak of $28,082. However, David Jones, president of the Association of Independent Consumer Credit Counseling Agencies, thinks that couples could be a lot more frugal if they weren’t brainwashed by friends, family and fantasies of celebrity weddings.

The Brides survey, conducted in May with over 1,270 responses, found that while nine in ten couples set a budget, 30 percent go over it anyway, including 40 percent of those who plan destination weddings.

To help pay for the wedding and reception, seven in ten couples dip into their savings account, while 30 percent will use credit cards. Most are confident of settling all their debts within six months after walking down the aisle.

While it’s always nice to have parents foot the bill for the affair, 62 percent of couples say they’ll either pay for part or all of the reception. That includes 36 percent who claim they’ll take care of the entire cost.

As for what the wedding will do to their personal finances, 54 percent of couples say that the price tag, no matter how high, won’t derail their future plans to buy a car or a house or even start a family.

iStockphoto/Thinkstock(WASHINGTON) -- Three of the country’s most prominent minds on U.S. budgetary problems issued a stark warning to lawmakers today as Congress approaches what many have called a “fiscal cliff” of tax hikes and spending cuts that are set to take effect Jan. 1.

Erskine Bowles, who served as President Clinton’s chief of staff, former Sen. Alan Simpson and billionaire investor Warren Buffet all expressed pessimism as to whether Congress and President Obama could reach a compromise to reduce the debt and avoid another fiscal crisis, during an interview with CNBC Thursday morning.

While both Republicans and Democrats have said they do not want to let all the tax cuts expire and plan to stave off the bulk of the spending cuts, Bowles said partisan politics would likely thwart any deal to avoid the looming taxmageddon.

“I think if I had to tell you the probability, I’d say the chances are we are going over the fiscal cliff,” Bowles said. “I hate to say it, but I think that’s probably right.”

Bowles, whom Obama appointed, along with Simpson, to create a bipartisan debt-reduction plan, said today that because debt reduction was “politically painful” and “really tough,” it was not likely Congress and the president would make the tough choices to reform entitlements, cut spending and simplify the tax code, as the Bowles-Simpson plan suggests.

“I think that if we don’t get these politicians to come together we face the most predictable economic crisis in history,” Bowles said during this morning’s interview in Sun Valley, Idaho. “I think it’s absolutely clear that the fiscal path we are on is not sustainable, and for me, the best analogy is these deficits are like a cancer, and over time they will destroy the country from within.”

The Congressional Budget Office estimated that if the Bush tax cuts were allowed to expire and the automatic spending cuts went into effect, the country would plunge back into a recession.

Bowles said that “every nickel” the country brings in each year only paid for interest on the debt and mandatory spending on entitlement programs, such as Medicare, Medicaid and Social Security.

“What that means is every single dollar we spent last year on these two wars, national defense, homeland security education infrastructure, high value-added research, every dollar was borrowed and half of it was borrowed from foreign countries,” he said. “That is crazy. Crazy! It’s a formula for failure in any organization.”

But while Democrats and Republicans bicker in Washington over which party was to blame for the current fiscal problems, Simpson said it’s the average American who pays the price.

“When the tipping point comes and the guys who gave us money want more money for their money inflation … and all these things in interest, guess who will be hurt the worst? The little guy that everybody talks about day and night,” Simpson said. “What fakery. What phoniness."

“What that means is every single dollar we spent last year on these two wars, national defense, homeland security education infrastructure, high value-added research, every dollar was borrowed and half of it was borrowed from foreign countries," he continued. "That is crazy. Crazy! It’s a formula for failure in any organization.”

David Paul Morris/Bloomberg via Getty Images(STOCKTON, Calif.) -- Stockton, Calif., officials announced Tuesday night that mediation with creditors failed, meaning the city of about 300,000 people is set to become the largest American city to ever declare bankruptcy.

"We think Chapter 9 protection is the only choice left. If we get any agreements, those will be honored in Chapter 9," City Manager Bob Deis told the City Council.

City lawyers could file for Chapter 9 protection in court as soon as Wednesday.

Vallejo, Calif., with half the population of Stockton, is the largest U.S. city to date to file for bankruptcy.

The benefit of filing for bankruptcy, Stockton officials say, would be to buy time for Stockton to renegotiate its debts on terms more advantageous to the city. It would remove, at least temporarily, the need for Stockton to make budget cuts even more drastic than those already made.

Stockton, before the bursting of its real estate bubble in 2007, had been riding high. Between 2000 and 2006, housing prices rose from a median of slightly more than $110,000 to almost $400,000, according to "How Stockton Went Bust," an analysis prepared by California Common Sense (CCS), a nonpartisan, nonprofit group advocating financial transparency.

The city spent generously on projects to rehabilitate and beautify its downtown. It developed a downtown marina. It augmented the salary and benefits of city workers.

The generous employment agreements to which the city committed in the mid-2000s, says the CCS report, now comprise the bulk of the city's budget.

"The city now faces more than $800 million in unfunded liabilities for pensions and other retirement benefits," the report notes.

The City Council has addressed about $90 million in deficits in the past three years, in part by eliminating 25 percent of the city's police force, 30 percent of its firefighters, and 43 percent of all other employees, according to a news release issued by the city.

It has sought to boost revenue through fines and parking citations, eliminating payments of bonds, modifications to terms of its labor agreements, and salary and benefit reductions.

Despite such efforts, the city faces a $26 million deficit in the fiscal year that begins on July 1. California's state constitution requires cities to adopt a balanced budget by July 1 of each year.

Office of California Gov. Jerry Brown(LOS ANGELES) -- In a state where jobs have been reduced, pensions whittled away, and offices closed to save money, California Governor Jerry Brown says it's still not enough.

Facing a $16 billion deficit, Brown is now proposing that all public employees take a 5-percent pay cut and that voters approve higher taxes.

“We have a more difficult problem. We're going to have to cut deeper,” Brown said Monday, proposing $8 billion in cuts from just about every part of government -- with big cuts to health care and social services.

“It's taken a long time....More than a decade to get into this mess,” Brown said.

JIM WATSON/AFP/Getty Images(NEW YORK) -- Less than 24 hours before President Obama’s 2013 budget is delivered to Congress, White House Chief of Staff Jacob Lew aimed to pre-empt the inevitable onslaught of criticism Sunday, defending the budget’s $1.3 trillion in additional deficit spending and $1.5 trillion in added tax revenue.

“We have tax cuts that go to people who don’t need them,” Lew said on This Week. “We have tax cuts going to the wealthiest people in America who are going to have to pay their fair share.”

Similar to his 2012 budget, the president’s 2013 budget calls for a minimum tax rate of 30 percent for millionaires and ends the Bush tax cuts for high-income earners.

Lew said that for every dollar of revenue, the budget includes $2.50 of spending cuts, including cuts to Medicare, Medicaid, agriculture subsidies and federal civilian workers’ pensions. Over the next decade, Lew said the president’s proposal will reduce spending so it will no longer add to the deficit and create stability in the economy.

But despite these cuts, the president’s budget would mark the fourth straight year deficit spending that exceeds $1 trillion. This deficit spending comes after Obama pledged upon taking office in 2009 that he would “cut the deficit we inherited by half by the end of my first term in office.”

Lew defended that failed pledge on Sunday.

“When we took office, the economy was falling so fast that the first thing we had to do was put a bottom in,” Lew said. “That cost money in the Recovery Act. It cost money in terms of lost revenue and slower economic growth. We’re on track now. We’ve seen several months of sustained economic growth and job creation, but we’re not out of the woods yet.”

Lew said the “American people should be pleased” with the recent uptick in the economy, but emphasized that the slow recovery is still in need of an “extra push,” which Lew said should come in the form of a payroll tax holiday extension.

The tax cut extension is currently stalled in a conference committee as the House and Senate seek to reconcile how to pay for extension. Lew called on Congress to “finish their work” and pass the payroll tax cut “on time.”

Official White House Photo by Pete Souza(WASHINGTON) -- President Obama’s 2013 budget, which will land with a thud on Congress’ doorstep Monday, shows the price the country continues to pay for the recession, projecting a deficit of $1.3 trillion for 2012, the White House said Friday.

Under the administration’s tax and spending proposals, the deficit would fall to $901 billion next year.

The budget largely echoes the domestic proposals that the president has been pushing for the last year, including spending for job creation and tax increases for the wealthy.

The president’s tax reform proposal would raise $1.5 trillion over the next decade, largely from eliminating the Bush-era tax cuts for the upper-income brackets. Obama will also continue to call for a “Buffett rule,” which would require millionaires to pay at least 30 percent of their income in taxes.

To further reduce the deficit, the president will propose $360 billion in cuts to Medicare and Medicaid and call for $278 billion in savings from non-health benefits programs such as agriculture subsidies and federal civilian worker pensions.

In terms of spending, the budget will include $350 billion for short-term job creation programs and $475 billion in infrastructure projects.

The election-year budget, however, is likely to gather dust on a Capitol Hill shelf. According to the White House, the budget will contain many items from a September proposal to the failed congressional deficit “super-committee,” which disagreed over tax increases and cuts to entitlement programs.

The president will unveil his budget in person in a speech Monday at Northern Virginia Community College.

The U.S. Postal Service is facing an $8.3 billion budget shortfall this year, in large part because of losing almost half of its first class mail to online bill pay and email communication.

After laying off 110,000 employees and cutting $12 billion over the past four years, the service is now looking to end mail delivery on Saturdays, a move it said would save $3.1 billion per year.

“That’s savings that we desperately need,” said U.S. Postal Service spokesman David Partenheimer. “It’s not the only thing we need to do to get out of the financial hole but it is very important.”

But even within the postal system, there is disagreement over whether a five-day delivery system will actually solve the problem. Despite not delivering mail, post offices would stay open, express or overnight mail would still be delivered and P.O. boxes would still receive mail.

The Postal Regulatory Commission, a president-appointed agency that oversees the Postal Services’ operations to ensure it doesn’t abuse its monopoly, estimated that cutting a delivery day would take three years to fully implement and would only save $1.7 billion per year thereafter.

“The key factor is that the Postal Service thinks it can take all the mail that it would otherwise deliver on Saturday and deliver it on Monday with no extra cost,” said regulatory commission chairman Ruth Goldway. “When we look at the operations, it just can’t happen.”

Despite not receiving any taxpayer money, the USPS is technically a government agency, so in order to eliminate a delivery day it has to get Congressional approval. Partenheimer said it has been trying to get approval since 2009, but this is the first year any legislation has been introduced.

While a shortened delivery schedule would help close the budget gap, both Partenheimer and Goldway said the real issue is the $5.5 billion the Postal Service has to pay every year into a fund for the health benefits of its future retirees.

Goldway said without the retiree fund payments, which were mandated starting in 2006, the mail service would be posting profits.

As it stands now, USPS will not be able to make the payment by its September due date, Postmaster General Patrick Donahue told USA Today on Wednesday.

"On Sept. 20, I won't be able to pay my bills," Donahue said.

If USPS cannot pay for its employees health care costs during retirement, that burden will fall to the federal government, a House Oversight Committee staffer said.